M/S Tulasi Medical Distributors vs. The State Of Karnataka

Facts

The petitioner, M/s Tulasi Medical Distributors, challenged an order dated 01/04/2024 and a consequential demand notice issued by the Commercial Tax Officer (Vigilance)-39 for the tax period 2018-2019. The petitioner had requested an adjournment for the personal hearing scheduled on 22.03.2024, citing his daughter's illness. The adjudicating officer declined this request, stating that sufficient opportunity had already been provided. The petitioner argued that this was their first request for an adjournment at the personal hearing stage and that Section 75(5) of the Act should be considered.

Held

The Court held that the adjudicating officer had acted in a hypertechnical manner by rejecting the petitioner's request for an adjournment. It was noted that the request was made on the ground of the daughter's illness and that this was the first request for an adjournment at the stage of the personal hearing. The Court found that Section 75(4) mandates granting an opportunity of hearing when a request is received or an adverse decision is contemplated, and Section 75(5) allows for adjournment if sufficient cause is shown, with a proviso limiting adjournments to three occasions. The Court reasoned that declining the first request for adjournment on the grounds of illness, without considering the spirit of the provisions, was not in line with meeting the ends of justice. Therefore, the impugned order and consequential demand notice were set aside, and the matter was remanded to the stage of personal hearing. The petitioner was directed to appear for the personal hearing on 28.06.2024. All contentions were kept open.

Key Issues

1. Whether the adjudicating officer erred in declining the petitioner's request for an adjournment for the personal hearing, despite it being the first such request at that stage, contrary to the provisions of Section 75(5) of the Karnataka Goods and Services Tax Act, 2017? Petitioner's Contention: The petitioner argued that Section 75(5) of the Act, which restricts adjournments to three occasions, should have been considered. They contended that their request for adjournment was made on the ground of their daughter's illness and that this was the first request for an adjournment at the personal hearing stage. They relied on Section 75(4) and 75(5) of the Act. Revenue's Contention: The revenue submitted that the request for adjournment ought to have been made at an earlier point in time.